First comes love, then comes commitment, then comes financial partnership.
Individuals who come into a relationship with solid money habits have an advantage, but to make love work, it’s essential to merge skills to maximize the most of dual incomes and hit shared goals and dreams.
Financial planning can be a source of frustration and friction when you have different attitudes toward saving and spending or aren’t sure where your money should be going.
Being a financially effective couple has nothing to do with being rich. It involves managing your money and allocating it effectively toward the things you value and want to do.
It also comes from knowing your and your partner’s money stories and money personalities.
There’s no handbook for how couples should manage their money effectively because, well, each pair wants different things out of life.
Still, there are ways to grow your money together while keeping arguments to a minimum.
1) Know Your Strengths and Weaknesses
Let’s face it; not everyone comes into a relationship with all the financial know-how. Rather than expect the more free-spirited person to become the master of spreadsheets, think about how they can best contribute to the financial relationship.
For example, if one of you is naturally more organized, that person can be the designated chief financial officer.
The other can help by bringing in extra income or making sure that the other doesn’t become too face-down in the numbers that they forget to enjoy the little things in life, like the occasional dinner out.
Figure out how each can own a financial role that feels joyful and not miserable.
2) Understand Your Needs, Wants, and Goals
Couples that manage their incomes juggle their short-term and long-term goals and allocate their paychecks into the near and distant future.
By creating buckets, for example, using the 50/30/20 rule (50% on needs, 30% on wants, and 20% on savings), you can start effectively planning with your money rather than just saving and spending sporadically.
For example, a couple making a combined yearly income of $80,000 after taxes could begin by each earmarking $800 a month toward shared monthly bills and expenses (a need), $200 a month toward a big anniversary trip to Australia in 2021 (a want) and $300 a month into their emergency funds and retirement accounts (savings).
3) Learn Each Other’s Money Stories
We enter into our relationships with a lot of baggage regarding our money. Our parents may have missed teaching us good values or how to handle personal finance.
Maybe they just weren’t good with money and weren’t role models. Your money story explains who you are financially and how you got there (and where you want to be in the future).
Learning each other’s money stories and how their attitudes developed over the years can help couples build intimacy and understanding.
There are fun ways to learn each other’s money stories. Consider starting with a fun game of 20 questions, and you’ll be surprised at how much you’ll learn about each other.
4) Set Up Monthly Money Dates
Most couples would rather take a dentist trip than sit and spend an evening discussing their financial situation. And who can blame them?
Conversations about money can be stressful and end with fights and recriminations. A solution is to set up a monthly money date to soften the tough topics’ blow and make them more regular, so there are no jolts or surprises.
A money date should happen once a month at an agreed-upon time when the children are asleep and with a glass of wine or a comforting dinner.
Taking an hour to go through your goals, debts, and feelings, as well as your long and short-term goals (and your progress towards them), can help make tough money talks easier to approach.
Conversations like this can also help tackle more challenging topics down the road, keep your money flowing in the right direction, and make for real positive change.
5) Start Automating Your Finances
Couples who let automation take on the burden of paying bills and certain shared expenses have more time to spend doing things that are, well, enjoyable.
Automating your finances means you don’t have to write a note to manually transfer money into your joint account or bug the other to pay your bill. But automating your finances is more than just simple convenience.
Automation allows us to reduce what behavioral economists call ‘the pain of paying. Combined with a lot of communication, automating your finances can help you save and spend together and separately.
6) Get to Know Your Money Personalities
Think a spender and a saver can’t find financial happiness? Nonsense. Opposites can attract as long as they agree on the bigger picture.
Research has shown that two savers may not be as financially compatible as one would think — one person may eventually become more drawn to spending.
Taking a money personality test is fun to help you figure out your spending and saving style.
Let each person bring their superpowers to do what they do best, so financial planning doesn’t feel like a chore.
It can also establish more trust between you and help you understand ways to make your money personalities complimentary versus at odds with each other.
Financial harmony comes from celebrating all the good that the other brings into the relationship and not harping on the things holding you back. If you schedule a monthly money date, end it with something fun and loving, such as a bowl of ice cream or a snuggle on the couch.
Reminding each other that you’re a team and here to support each other through thick and thin is the most important thing that successful couples can do, financially or otherwise.
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This was originally published by Wealth of Geeks.